[Introduced February 21,
2017; Referred
to the Committee on Energy, Industry and Mining; and then to the Committee on
the Judiciary]

A BILL to amend and reenact §11A-3-19, §11A-3-21, §11A-3-23, §11A-3-52,
§11A-3-54 and §11A-3-56 of the Code of West Virginia, 1931, as amended; to amend
said code by adding thereto two new sections, designated §11A-3-23a and §11A-3-58a;
and to amend and reenact §11A-4-4 of said code, all relating to permitting
surface owners to purchase the mineral interests that lay below the property
when the mineral interest becomes subject to a tax lien; establishing
procedures; requiring notice; establishing the purchase prices; establishing
nonrefundable $20 administrative fee; providing a procedure if more than one
surface owner seeks to purchase the delinquent mineral interest; modifying
notices to redeem that are sent to property owners; and providing remedies
relating to tax sales.

Be it enacted by the
Legislature of West Virginia:

That §11A-3-19, §11A-3-21, §11A-3-23, 11A-3-52,
§11A-3-54 and §11A-3-56 of the Code of West Virginia, 1931, as amended, be
amended and reenacted; that said code be amended by adding thereto two new
sections, designated §11A-3-23a and §11A-3-58a; and that §11A-4-4 of said code
be amended and reenacted, all to read as follows:

(a) At any time after
October 31 of the year following the sheriff's sale, and on or before December
31 of the same year, the purchaser, his or her heirs or assigns, in order to
secure a deed for the real estate subject to the tax lien or liens purchased,
shall:

(1) Prepare a list of those
to be served with notice to redeem and request the State Auditor to prepare and
serve the notice as provided in sections twenty-one and twenty-two of this
article;

(2) When the real property
subject to the tax lien is classified as Class II property, provide the State
Auditor with the physical mailing address of the property that is subject to
the tax lien or liens purchased;

(3) Provide the State
Auditor with a list of any additional expenses incurred after January 1 of the
year following the sheriff’s sale for the preparation of the list of those to
be served with notice to redeem including proof of the additional expenses in
the form of receipts or other evidence of reasonable legal expenses incurred
for the services of any attorney who has performed an examination of the title
to the real estate and rendered written documentation used in the preparation
of the list of those to be served with the notice to redeem. However, for an
interest in real estate identified in subsection (b) of this section the
purchaser, or other authorized person, of the property shall pay the reasonable
costs related to preparing the list of those served with notice to redeem,
other than surface owners, as provided by subdivision (3), subsection (a),
section twenty-three of this article;

(4) Deposit with the State
Auditor a sum sufficient to cover the costs of preparing and serving the
notice; and

(5) Present the purchaser's
certificate of sale, or order of the county commission where the certificate
has been lost or wrongfully withheld from the owner, to the State Auditor.

If the purchaser fails to
meet these requirements, he or she shall lose all the benefits of his or her
purchase.

(b) For an interest in
real estate subject to the tax lien that includes minerals, but not an interest
in the surface other than an interest in the surface for the purpose of
developing the minerals, the list shall include the last known name and mailing
address of the taxpayer who receives a tax ticket for the surface property
shown on the tax maps identified in subsection (e), section seven, article
one-c, chapter eleven of this code that lie above the mineral tract. If these
requirements are not met, all the benefits of the purchase will be lost.
However, no deed to a bona fide purchaser for value from a purchaser, or a surface
owner substituted for a purchaser, may be set aside for failure of the
purchaser to comply with this subsection, but this limitation does not affect
any other remedies at law.

(b)(c) If the person requesting preparation and
service of the notice is an assignee of the purchaser, he or she shall, at the
time of the request, file with the State Auditor a written assignment to him or
her of the purchaser's rights, executed, acknowledged and certified in the
manner required to make a valid deed.

(c)(d) Whenever any certificate given by the
sheriff for a tax lien on any land, or interest in the land sold for delinquent
taxes, or any assignment of the lien is lost or wrongfully withheld from the
rightful owner of the land and the land or interest has not been redeemed, the
county commission may receive evidence of the loss or wrongful detention and,
upon satisfactory proof of that fact, may cause a certificate of the proof and
finding, properly attested by the State Auditor, to be delivered to the
rightful claimant and a record of the certificate shall be duly made by the
county clerk in the recorded proceedings of the commission.

§11A-3-21. Notice to
redeem.

(a) Whenever the provisions
of section nineteen of this article havehas been complied
with, the State Auditor shall prepare a notice in form or effect as follows:

To
___________________________________.

You will take notice that
_______________, the purchaser (or _____________, the assignee, heir or devisee
of _______________, the purchaser) of the tax lien(s) on the following real
estate, __________________, (here describe the real estate for which the tax
lien(s) thereon were sold) located in ___________________, (here name the city,
town or village in which the real estate is situated or, if not within a city,
town or village, give the district and a general description) which was
returned delinquent in the name of ________________, and for which the tax
lien(s) thereon was sold by the sheriff of __________________ County at the
sale for delinquent taxes made on the ____________ day of _____________, 20____,
has requested that you be notified that a deed for such real estate will be
made to him or her on or after April 1, 20 ____, as provided by law, unless
before that day you redeem such real estate. The amount you will have to pay
to redeem on the last day, March 31, will be as follows:

Amount equal to the taxes,
interest, and charges due on the date of sale, with interest to March 31, 20
_______ ........ $__________.

Amount of subsequent years
taxes paid on the property, since the sale, with interest to March 31, 20 ____
........ $___________

Amount paid for title
examination and preparation of list of those to be served, and for preparation
and service of the notice with interest from January 1, 20 (insert year)
following the sheriff’s sale to March 31, 20 ______ ........ $__________

You may redeem at any time
before March 31, 20 _______________, by paying the above total less any
unearned interest.

NOTE: If you have
received this notice because you are the owner of an interest in the surface
overlaying a mineral interest that was returned delinquent, you may pay the
clerk twice the amount identified above, plus a nonrefundable $20
administrative fee, before March 1, 20___. If you pay the required amount and
the property is then redeemed, that amount you paid, less the administrative
fee, will be refunded to you. If you pay the required amount and the property
is not redeemed, you will be substituted for the purchaser of the tax lien and
you may proceed to obtain a deed for the property. If you and one or more
additional surface owners each pay the appropriate amount, all the surface
owners who have made payment shall submit, by April 7, 20___, an agreement dividing
the real estate according to their proportionate shares or any other method or
formula agreed to among all of you. If an agreement is not filed, the clerk
shall refund the moneys tendered by the surface owners, less the administrative
fees, and none of you will be substituted for the purchaser of the tax lien.

Given under my hand this
_____ day of __________, 20 ____.

_________________________________________________________________

State Auditor, State of
West Virginia

(b) The State Auditor for his
or her service in preparing the notice shall receive a fee of $10 for the
original and $2 for each copy required. Any additional costs which must be
expended for publication, or service of the notice in the manner provided for
serving process commencing a civil action, or for service of process by
certified mail, shall be charged by the State Auditor. All costs provided by
this section shall be included as redemption costs and included in the notice
described in this section.

(a) After the sale of any
tax lien on any real estate pursuant to section five of this article, the owner
of, or any other person who was entitled to pay the taxes on, any real estate
for which a tax lien on the real estate was purchased by an individual may
redeem at any time before a tax deed is issued for the real estate. In order
to redeem, he or she shall pay to the State Auditor the following amounts:

(1) An amount equal to the
taxes, interest and charges due on the date of the sale, with interest at the
rate of one percent per month from the date of sale;

(2) All other taxes which
have since been paid by the purchaser, his or her heirs or assigns, with
interest at the rate of one percent per month from the date of payment;

(3) Any additional expenses
incurred from January 1 of the year following the sheriff’s sale to the date of
redemption for the preparation of the list of those to be served with notice to
redeem and any written documentation used for the preparation of the list, with
interest at the rate of one percent per month from the date of payment for
reasonable legal expenses incurred for the services of an attorney who has performed
an examination of the title to the real estate and rendered written
documentation used for the preparation of the list: Provided, That the
maximum amount the owner or other authorized person shall pay, excluding the
interest, for the expenses incurred for the preparation of the list of those to
be served required by section nineteen of this article is $300, plus any
costs required by subsection (b), section nineteen of this article:Provided
however, That the attorney may only charge a fee for legal services
actually performed and must certify that he or she conducted an examination to
determine the list of those to be served required by section nineteen of this
article; and

(4) All additional
statutory costs paid by the purchaser.

(b) Where the State Auditor
has not received from the purchaser satisfactory proof of the expenses incurred
in preparing the notice to redeem, and any written documentation used for the
preparation of the list of those to be served with notice to redeem, including
the certification required in subdivision (3), subsection (a) of this section,
incident thereto, in the form of receipts or other evidence of legal expenses,
incurred as provided in section nineteen of this article, the person redeeming
shall pay the State Auditor the sum of $300 plus interest at the rate of one
percent per month from January 1 of the year following the sheriff’s sale for
disposition by the sheriff pursuant to the provisions of sections ten,
twenty-four, twenty-five and thirty-two of this article.

(c) The person redeeming
shall be given a receipt for the payment and the written opinion or report used
for the preparation of the list of those to be served with notice to redeem
required by section nineteen of this article.

(d) Any person who, by
reason of the fact that no provision is made for partial redemption of the tax
lien on real estate purchased by an individual, is compelled in order to
protect himself or herself to redeem the tax lien on all of the real estate
when it belongs, in whole or in part, to some other person, shall have a lien
on the interest of that other person for the amount paid to redeem the
interest. He or she shall lose his or her right to the lien, however, unless
within thirty days after payment he or she files with the clerk of the county
commission his or her claim in writing against the owner of the interest,
together with the receipt provided in this section. The clerk shall docket the
claim on the judgment lien docket in his or her office and properly index the
claim. The lien may be enforced as other judgment liens are enforced.

(e) Before a tax deed is
issued, the county clerk may accept, on behalf of the State Auditor, the
payment necessary to redeem any real estate encumbered with a tax lien and
write a receipt. The amount of the payment necessary to redeem any real estate
encumbered with a tax lien shall be provided by the State Auditor and the State
Auditor shall update the required payments plus interest at least monthly.

(f) On or before the tenth
day of each month, the county clerk shall deliver to the State Auditor the
redemption money paid and the name and address of the person who redeemed the
property on a form prescribed by the State Auditor.

§11A-3-23a. Surface
owner substitution for purchaser.

(a) If the real estate
interest subject to a tax lien is an interest that includes minerals, but does
not include an interest in the surface other than an interest for the purpose
of developing the minerals, then prior to March 31 of the year following the
sale an owner of record of the surface above the property subject to the tax
lien being sold may pay the clerk: (1) Twice the amount that would be required
for redemption pursuant to section twenty-three of this article; and (2) a nonrefundable
$20 administrative fee. The clerk shall issue the surface owner a certificate
of substitution and send a copy to the purchaser. If more than one surface
owner makes this payment to the clerk, the clerk shall issue each a certificate
of substitution for each and send copies of the certificates of substitution to
the others in addition to the purchaser. If a purchaser can demonstrate to the
clerk that he or she is related to the owner of the property in whose name it
is listed, then the clerk may, in his or her sole discretion, cancel the
certificates of substitution and refund all moneys paid by the surface owner or
owners, less the $20 administrative fee.

(b) If the property is
redeemed, the clerk shall refund the moneys paid, less the administrative fees.

(c) If the property is
not redeemed, and if only one surface owner has received a certificate of
substitution, then the clerk shall send the amount paid by the surface owner to
the purchaser, less the $20 administrative fee, and record the certificate of
substitution. That surface owner enjoys the full rights and duties of the
purchaser.

(d) If more than one
surface owner pays the clerk the appropriate amount the surface owners shall
submit an agreement dividing the property according to their proportionate
shares, or another mutually agreeable method or formula approved by all of
them, by April 15 of the year following the sale of the lien. No deed may be
issued before April 15 of the year following the sale. The interest of an
owner of a surface tract shall be equal to the acreage stated on documents of
record even if the owner only owns an undivided interest. However, if more than
one owner of an undivided interest in the same tract pays the clerk the
appropriate amount, his or her share shall be the total acreage of the
undivided tract divided by the number of owners of the tract who have also paid
the clerk. If an agreement is filed, then the clerk shall make an amended
certificate dividing the property according to their respective interests and
refund any remaining moneys paid by them according to their agreed interests.
If no agreement is filed, the clerk shall refund the moneys paid to the surface
owners, less the $20 administrative fees, and the original purchaser is
returned to his or her original position.

§11A-3-52. What
purchaser must do before he can securesecuring a deed.

(a) Within forty-five days
following the approval of the sale by the Auditor pursuant to section fifty-one
of this article, the purchaser, his or her heirs or assigns, in order to
secure a deed for the real estate purchased, shall:

(1) Prepare a list of those
to be served with notice to redeem and request the deputy commissioner to
prepare and serve the notice as provided in sections fifty-four and fifty-five
of this article;

(2) When the real property
subject to the tax lien was classified as Class II property, provide the deputy
commissioner with the actual mailing address of the property that is subject to
the tax lien or liens purchased; and

(3) Deposit, or offer to
deposit, with the deputy commissioner a sum sufficient to cover the costs of
preparing and serving the notice.

(b) If the purchaser fails
to fulfill the requirements set forth in paragraphsubsection (a)
of this section, the purchaser shall lose all the benefits of his or her
purchase.

(c) After the requirements
of paragraphsubsection (a) of this section have been satisfied,
the deputy commissioner may then sell the property in the same manner as he or
she sells lands which have been offered for sale at public auction but
which remain unsold after such auction, as provided in section forty-eight of
this article.

(d) For an interest in
real estate subject to the tax lien or liens that includes minerals but does
not include an interest in the surface, except an interest for the purpose of
developing the minerals, the list shall include the last known name and mailing
address of the taxpayer known to the sheriff to which the sheriff is required
to send a tax ticket pursuant to section eight, article one of this chapter for
all tracts of surface property shown on the tax maps, provided in subsection
(e), section seven, article one-c, chapter eleven of this code, that lie above
the mineral tract subject to the tax lien or liens purchased. No deed to a
bona fide purchaser for value from a purchaser or a surface owner substituted
for a purchaser may be set aside for failure of the purchaser to comply with
this subsection. This limitation does not affect any other remedies at law.

(d)(e) If the person requesting preparation and
service of the notice is an assignee of the purchaser, he or she shall,
at the time of the request, file with the deputy commissioner a written
assignment to him or her of the purchaser's rights, executed,
acknowledged and certified in the manner required to make a valid deed.

§11A-3-54. Notice to
redeem.

Whenever the provisions
of section fifty-two of this article havehas been complied
with, the deputy commissioner shall thereupon prepare a notice in form or
effect as follows:

To
_____________________________________

You will take notice that
___________________, the purchaser (or _____________, the assignee, heir or
devisee of ____________, the purchaser) of the following real estate,
___________________, (here describe the real estate sold) located in
________________, (here name the city, town or village in which the real estate
is situated or, if not within a city, town or village, give the district and a
general description) which was __________________ (here put whether the
property was returned delinquent or nonentered) in the name of
__________________, and was sold by the deputy commissioner of delinquent and
nonentered lands of _________________ County at the sale for delinquent taxes
(or nonentry) on the ______ day of _________________, 1920____,
has requested that you be notified that a deed for such real estate will be
made to him or her on or after the ______ day of _____________, 1920____, as provided by law, unless before that day you redeem such real
estate. The amount you will have to pay to redeem on the ________ day of
__________________,20__, will be as follows:

Amount equal to the taxes,
interest and charges due on the date of sale, with interest to ______________
.........$_________

Amount of taxes paid on the
property, since the sale, with interest to _______________ ..........$_________

Amount paid for title
examination and preparation of list of those to be served, and for preparation
and service of the notice with interest to ______________ ..........$_________

You may redeem at any time
before _________________ by paying the above total less any unearned interest.

NOTE: If you are
receiving this notice because you are the owner of an interest in the surface
overlaying a mineral interest which was returned delinquent, you may, before
the above date, pay the deputy commissioner: (1) Twice the amount identified
above; (2) the amount identified above or $3,000, whichever is less; and (3) a
nonrefundable $20 administrative fee. If you pay the required amount and the
property is redeemed, the amount you paid, less the administrative fee, will be
refunded. If you pay the required amount and the property is not redeemed, you
will be substituted for the purchaser of the tax lien and may proceed to obtain
a deed for the property. If you do so and if one or more additional surface
owners do so, then the surface owners must submit an agreement dividing the
property according to their proportionate shares. If an agreement is not
filed, the deputy commissioner shall refund the moneys tendered by the surface
owners, less the administrative fees, and the original purchaser will be
returned to his or her original rights and duties.

Given under my hand this
________ day of __________________, 20_____.

_________________________________

Deputy Commissioner of
Delinquent

and Nonentered Lands

______________________
County,

State of West Virginia

The deputy commissioner for
his or her service in preparing the notice shall receive a fee of $10
for the original and $2 for each copy required. Any costs which must be
expended in addition thereto for publication, or service of such notice in the
manner provided for serving process commencing a civil action, or for service
of process by certified mail, shall be charged by the deputy commissioner. All
costs provided by this section shall be included as redemption costs and
included in the notice described herein.

(a) After the sale of any
tax lien on any real estate pursuant to section forty-five or forty-eight of
this article, the owner of, or any other person who was entitled to pay the
taxes on, any real estate for which a tax lien thereon was purchased by an
individual, may redeem at any time before a tax deed is issued therefor. In
order to redeem, he or she must pay to the deputy commissioner the
following amounts: (1) An amount equal to the taxes, interest and charges due
on the date of the sale, with interest thereon at the rate of one percent per
month from the date of sale; (2) all other taxes thereon, which have since been
paid by the purchaser, his or her heirs or assigns, with interest at the
rate of one percent per month from the date of payment; (3) such additional
expenses as may have been incurred in preparing the list of those to be served
with notice to redeem, and any title examination incident thereto, with
interest at the rate of one percent per month from the date of payment, but the
amount he or she shall be required to pay, excluding said interest, for
such expenses incurred for the preparation of the list of those to be served
with notice to redeem required by section fifty-two of this article, and any
title examination incident thereto, shall not exceed $200 and, if the real
estate is subject to subsection (d), section fifty-two of this article, the
reasonable cost for determining the location of all tracts of surface property
shown on the tax maps identified in subsection (e), section seven, article
one-c, chapter eleven of this code that lie above the real estate subject to
the tax lien or liens purchased not to exceed the actual amount incurred for
the preparation of the list of those to be served with the notice to redeem
other than the surface owner; (4) all additional statutory costs paid by
the purchaser; and (5) the deputy commissioner's fee and commission as provided
by section sixty-six of this article. Where the deputy commissioner has not
received from the purchaser satisfactory proof of the expenses incurred in
preparing the notice to redeem, and any examination of title incident thereto,
in the form of receipts or other evidence thereof, the person redeeming shall
pay the deputy commissioner the sum of $200 plus interest thereon at the rate
of one percent per month from the date of the sale for disposition pursuant to the
provisions of sections fifty-seven, fifty-eight and sixty-four of this
article. Upon payment to the deputy commissioner of those and any other unpaid
statutory charges required by this article, and of any unpaid expenses incurred
by the sheriff, the Auditor and the deputy commissioner in the exercise of
their duties pursuant to this article, the deputy commissioner shall prepare an
original and five copies of the receipt for the payment and shall note on said
receipts that the property has been redeemed. The original of such receipt
shall be given to the person redeeming. The deputy commissioner shall retain a
copy of the receipt and forward one copy each to the sheriff, assessor, the Auditor
and the clerk of the county commission. The clerk shall endorse on the receipt
the fact and time of such filing and note the fact of redemption on his or
her record of delinquent lands.

(b) Any person who, by
reason of the fact that no provision is made for partial redemption of the tax
lien on real estate purchased by an individual, is compelled in order to
protect himself or herself to redeem the tax lien on all of such real
estate when it belongs, in whole or in part, to some other person, shall have a
lien on the interest of such other person for the amount paid to redeem such
interest. He or she shall lose his or her right to the lien,
however, unless within thirty days after payment he or she shall file
with the clerk of the county commission his or her claim in writing
against the owner of such interest, together with the receipt provided for
in this section. The clerk shall docket the claim on the judgment lien docket
in his or her office and properly index the same. Such lien may be
enforced as other judgment liens are enforced.

§11A-3-58a. Surface
owner substitution for purchaser.

(a) If the real estate
interest subject to a tax lien is a mineral interest, but does not include an
interest in the surface other than an interest for the purpose of developing
the minerals, then within thirty days after notices to redeem have been served,
or an attempt of personal service has been made, the notices have been mailed
or, if necessary, published in accordance with section fifty-five of this
article, following the deputy commissioner’s sale, a surface owner above the
mineral interest may pay to the deputy commissioner: (1) Twice the amount that
would be required for redemption; (2) the amount that would be required for
redemption or $3,000, whichever is less; and (3) a nonrefundable $20
administrative fee. The deputy commissioner shall issue the surface owner a
certificate of substitution and send a copy to the purchaser. If more than one
surface owner of record submits payment to the deputy commissioner, the deputy
commissioner shall issue each a certificate of substitution and send copies of
the certificates of substitution to the others in addition to the purchaser.

(b) If the property is
redeemed, the deputy commissioner shall refund the moneys paid by the surface
owners, less the administrative fees.

(c) If the property is
not redeemed, and if only one surface owner has received a certificate of
substitution, then the deputy commissioner shall send the amount paid by the
surface owner to the purchaser and record the certificate of substitution. The
surface owner is substituted and has the full rights and duties of the
purchaser.

(d) If more than one
surface owner submits payment, before an additional fifteen days, the surface
owners must submit an agreement dividing the real estate according to their proportionate
share. The interest of an owner of a surface tract shall be equal to the
acreage stated on documents of record even if the owner only owns an undivided
interest. However, if more than one owner of an undivided interest submits
payment, their proportionate shares are the total acreage of the undivided
tract divided by the number of owners of the tract who pay in. If no agreement
is filed, then the deputy commissioner shall refund their moneys, less the
administrative fees, and the original purchaser is returned to his or her
original position. If an agreement is filed, then the deputy commissioner
shall make an amended certificate showing the division according to their
interests, the deputy commissioner shall send the purchaser twice the amount
required for redemption, and divide the remaining money paid by all surface
owners according to their agreed interests.

ARTICLE 4. REMEDIES
RELATING TO TAX SALES.

§11A-4-4. Right to set
aside deed when one entitled to notice not notified.

(a) If any person entitled
to be notified under the provisions of section twenty-two or fifty-five,
article three of this chapter is not served with the notice as therein
required, and does not have actual knowledge that such notice has been given to
others in time to protect his or her interests by redeeming the
property, or is exercising rights as a surface owner pursuant to sections
twenty-three-a or fifty-eight-a, article three of this chapter, he or
she, his or her heirs and assigns, may, before the expiration of
three years following the delivery of the deed, institute a civil action to set
aside the deed. No deed shall be set aside under the provisions of this
section until payment has been made or tendered to the purchaser, or his or
her heirs or assigns, of the amount which would have been required for
redemption or the exercise of rights as a surface owner pursuant to sections
twenty-three-a or fifty-eight-a, article three of this chapter, together
with any taxes which have been paid on the property since delivery of the deed,
with interest at the rate of twelve percent per annum.

(b) No title acquired
pursuant to this article shall be set aside in the absence of a showing by
clear and convincing evidence that the person who originally acquired such
title failed to exercise reasonably diligent efforts to provide notice of his or
her intention to acquire such title to the complaining party or his or
her predecessors in title.

(c) Upon a preliminary
finding by the court that the deed will be set aside pursuant to this section,
such amounts shall be paid within one month of the entry thereof. Upon the
failure to pay the same within said period of time, the court shall upon the
request of the purchaser, enter judgment dismissing the action with prejudice.

NOTE: The purpose of this bill is
to permit surface owners to purchase the
mineral interests that lay below the property when the mineral interest becomes
subject to a tax lien. The bill establishes procedures to be followed. The bill
requires notice. The bill establishes the purchase prices. The bill
establishes certain nonrefundable $20 administrative fees. The bill provides a
procedure if more than one surface owner seeks to purchase the delinquent
mineral interest. The bill modifies notices to redeem that are sent to
property owners. The bill provides remedies relating to tax sales.

Strike-throughs indicate language
that would be stricken from a heading or the present law and underscoring
indicates new language that would be added.